ISLAMABAD: Crude oil prices went down around one percent on Tuesday over demand concerns due to the Covid-19 and expectations that OPEC+ will raise oil output during its meeting scheduled for Wednesday.
At 1300 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, shed $0.64 (-0.87 percent) to reach $72.77 a barrel. Similarly, the US West Texas Intermediate (WTI) reached $68.46 a barrel, down by $0.75 (-1.08 percent).
The price for Opec Basket was recorded at $71.48 a barrel with 1.03 percent increase, Arab Light was available at $74.31 a barrel with 1.31 percent increase, while the price of Russian Sokol jumped to $72.48 after gaining 0.37 percent.
Meanwhile, tropical storm Ida that hit Louisiana, a state near the Gulf of Mexico, last week, disrupted processing facilities at six that process 1.92 million barrels per day (bpd) of crude, around 12% of U.S. refining capacity, according to Reuters.
“With companies currently assessing damages, a current timeline for how long shuttered capacity will be down is still uncertain,” RBC analysts said in a note. With catastrophic damage to the grid in Louisiana, power outages could last three weeks, utility officials said, which would slow efforts to repair and restart energy facilities.
On the supply side, about 1.72 million bpd of oil production remained shut in the U.S. side of the Gulf of Mexico as platforms were evacuated ahead of the hurricane, with companies expecting it to take days to get a full assessment of possible damage. Also keeping a lid on oil prices is the prospect that the Organisation of the Petroleum Exporting Countries (OPEC) and allies, together known as OPEC+, will agree to go ahead with plans to add another 400,000 bpd of supply each month through December.